Startup Commercialization Strategies of Disruptive Technologies: Implications for the Rate of Scientific Discovery

Abstract

Startups rushing to market with potentially disruptive technologies have the potential to reduce the documented negative effect of private return incentives for scientific discovery (basic research). While it is optimal for startups of disruptive technologies to enter the market to validate their technology in order to enable options for other market transactions, this entry strategy influences industry’s innovation incentives as the revealed technology threatens the incumbents’ trajectory. Furthermore, given the uncertainty of such technologies - ambiguity regarding technology’s robust scientific likelihood to improve to reach its disruptive potential - innovations efforts unfold predominantly in the realm of scientific discovery, leading to an increase in the rate of basic research in the knowledge area of the technology. I provide evidence from efforts to develop and commercialize quantum computing.